RFI Exclusive: David Malpass, World Bank president on its Covid-19 reponse globally
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The World Bank Group said that its emergency operations to fight COVID-19 pandemic have reached 100 developing countries, or 70% of the world’s population. Assistance measures worth $160 billion in grants and financial support form the largest and fastest crisis response in the Bank Group’s to date. In an exclusive interview, RFI’s Olivier Rogez talked to World Bank president David Malpass.
RFI: What have you learned from this pandemic from a personal point of view? And did this experience challenge your vision of the economy?
David Malpass: This is the worst economic slump and the fastest that I've seen in many decades. It hurts the poorest countries the most, and the poorest countries and their people are very dependent on the advanced economies.
Those economies have shut down and have yet to reopen - they're looking for ways to reopen safely. But that’s a key step for the developing world. They need the remittances, they need tourism, they need orders from the more advanced economies.
RFI: As head of the World Bank, you are helping hundred countries around the world in the fight against this pandemic. What form has this taken so far?
We called for a moratorium on debt repayments by the countries that will save [poorer coutries] quite a bit of money which they can then allocate to health care spending.
PODCAST: Interview with David Malpass, President of the World Bank
David Malpass: Largely through grants and very low interest rate loans. [These loans] help countries with their immediate health crisis. The money goes to personal protective equipment or other equipment that is needed by frontline health care providers.
We're talking to the poorest countries in the world with a method now that they can get the equipment that they need to fight the pandemic and also other health crises.
Its been welcomed by these countries. And there's been a fast track approach to getting this done. Since the middle of March, we've been able to put in place programs in 100 different countries.
RFI: How much money do you provide these countries with?
David Malpass: So far we have distributed US$5.5 billion. The programs are set up so that they're expandable.This means that bilateral donors, that means countries in the advanced world, can add money to these programs in order to provide more equipment or to provide more of the assistance that the countries request
RFI: In mid-April, your bank said that it was looking for another US$44 billion to help African countries in the fight against the pandemic. Did you find this sum?
David Malpass: Over the next 15 months, so that's through June of 2021, we are committed to providing US$160 billion of support to finance for the countries, including grants and low interest rate loans.
Much of that goes to sub Saharan Africa. Even then it won't be enough. So we are doing other things. I have launched a debt moratorium with Kristalina Georgieva of the IMF in March. We called for a moratorium on debt repayments by the countries that will save them quite a bit of money which they can then allocate to health care spending.
Commercial creditors, the banks and the asset managers and so on, are expected to participate in this moratorium. But there's been reluctance on their part to stop taking the repayments from the poorest countries.
RFI: What can be done to push them to cancel or to freeze the debts and the repayment of the debts of the poorest countries?
David Malpass: One thing is for them to meet as a group and talk about it and decide what would be the best course of action given the extent of the crisis. There's got to be a connection between the commercial creditors and the urgency of the crisis. And so I'm hoping that they will find groupings that will be supportive of the response to the crisis sets.
Another thing is the countries need to look at what their best options are within the crisis itself. I'm optimistic that the commercial creditors will see that it's in the long run interest of the world of the of the countries to take a look at the G-20 communique that called on the commercial creditors to provide comparable treatment.
RFI: In Africa people see the EU and countries like China and the United States with trillion-dollar plans, but at the same time, cancelling African debts is impossible. What can you tell those people?
David Malpass: People in the countries and their governments need to look at their own situation and what is the best way to move forward in terms of the variety of tools and resources available.
What the World Bank is doing is providing very large net positive resources to the countries. There have been some calls for multilateral debt relief, meaning countries do not have to pay their their World Bank debt.
The problem with that is the World Bank, unlike these other creditors, uses bond markets to supply the funds. So non-payment would be a very prompt negative in terms of the flow to the countries.
So, I think more useful path is for the countries to look at their bilateral official creditors and look for ways to get more resources.
Of paramount importance for the countries is the safe reopening of the advanced economies. And then doing their best with their own development, which includes the private sector and which includes sustainable development concepts that make their make their countries’ living standards go up.
RFI: The private sector in Africa is suffering. This sector is largely informal. How can you help the informal sector in Africa concretely?
David Malpass: Through the International Finance Corporation, the IFC, we're providing working capital for companies - that means the capital and the short term loans that they need to hold the inventory and to hold accounts receivable and other ways of doing commercial business.
So that's, that's one positive step. Then there are micro enterprises. And what we want to do is try to continue the flow of funds through the micro enterprises, because those funds get to actual people.
The big recovery step for many of the poorest countries will be the people themselves. They need to survive the crisis and have food and education programs continue, and then be ready to rebuild on the other side of the recession. So we're working on all of those with our programs.
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